Chargeable events on void ISAs: termination events
In order for an insurance policy to be held as a qualifying investment in a valid ISA it must meet various conditions. These conditions are described in the ‘Guidance Notes for ISA Managers’, which can be found on the HMRC website.
One of those conditions is that the contractual terms of the policy provide that the policy is automatically terminated if it comes to the notice of the ISA manager that the ISA is void because the ISA conditions are, or have been, breached.
An ISA will be void if
- the policy has ceased to meet the conditions to be held as a qualifying investment in a valid ISA, or
- those conditions were not met on the date that the policy was taken out.
This could be, for instance, because the investor has subscribed to another mini-ISA of the same type in the same year. The ISA Guidance Notes have more on this.